The Dim-Post

December 5, 2011

Neutral evil

Filed under: economics,Politics — danylmc @ 9:56 pm

Via Stuff:

Treasury has lowered its growth forecasts from 3.4 per cent to 3 per cent for 2013 and warned of cuts to government revenue as the European crisis rumbles on.

Right. So just to recap: Treasury made these very optimistic growth predictions in the 2011 budget, and everyone said they were delusional. But Treasury stood by their forecasts, and a month out from the election they repeated their insanely optimistic outlook in the PREFU.

The government and opposition parties based all of their fiscal policies on the Treasury forecasts. Both main parties claimed they’d get the country back into surplus in a few years, because of all the additional revenue from all that economic growth. Jobs weren’t a big topic of debate in this election, because Treasury promised us that all the growth would create 170,000 new jobs!

Now here we are, just over a week after the election and whaddya know? Treasury has announced they were too optimistic. Growth is going to be less than they said it would a month ago – even though nothing substantive has changed since then. The European crisis didn’t just emerge on Sunday the 27th.

This looks an awful lot like a government department conspiring to defraud the country during an election campaign. If it ain’t that then it’s gross incompetence. But because they screwed up/lied to us in a way that advantages the main political parties, no one gets held accountable and nothing changes. The Prime Minister is relaxed.


  1. Careful, Danyl. An obsession with the Treasury unhinges the obsessor. Many left wing economists have never recovered from it. It is the anti-semitism of the intellectuals.

    Comment by Tinakori — December 5, 2011 @ 10:01 pm

  2. Don’t be ridiculous.
    They know what is best for us or this last week of voting was a farce.
    Obviously they knew about this failure of the international markets and their estimate of growth takes into account all possible failures of the european market.

    Comment by Greg — December 5, 2011 @ 10:03 pm

  3. I think the Treasury modelers are more chaotic neutral judging by the results.

    Comment by Richard — December 5, 2011 @ 10:18 pm

  4. the premise was “if European leaders deal with the debt crisis”. Well Sarkozy is getting a lot of free air time in France which probably wont hurt his re-election campaign. Saving the euro, who knows.

    but I’ll beleive you’re angry when interest rates go up. That’l make it personal

    Comment by NeilM — December 5, 2011 @ 10:24 pm

  5. No big deal – shit’s dynamic

    Comment by Patrick — December 5, 2011 @ 10:26 pm

  6. You know The Wire alignment chart? Someone should do one of those up for NZ politics.


    Comment by Lew — December 5, 2011 @ 10:43 pm

  7. There should have been some more hard questions during the campaign about how reliable the future projections of the main parties were. The amount they fussed over with Goff not knowing the detail off the top of his head in an interview is probably small next to the consequences of the Treasury information they were using being out.

    Comment by bka — December 5, 2011 @ 10:44 pm

  8. Any voter clever enough to pay attention to what Treasury think, probably realised that what Treasury was saying was about as reassuring as an EU bail out plan.

    Comment by ZenTiger — December 5, 2011 @ 10:58 pm

  9. ..and swap “reassuring” for accurate if my meaning wasn’t clear.

    Comment by ZenTiger — December 5, 2011 @ 10:59 pm

  10. Maybe if we had a media that asked questions instead of repeating press releases? Of course, first they would have to find and employ some real journalists from somewhere.

    Where from?

    Fucked if I know really, but one thing for sure, not from any of those gape jawed indoctrinated rubes who may have recently graduated from any NZ university “journalist” courses.

    Comment by Redbaiter — December 5, 2011 @ 11:48 pm

  11. Aw, c’mon everyone, Treasury are the GOOD GUYS, they never ever get things wrong.
    How could they get things wrong with all those Hons grads and PhDs on staff.

    Look how well ex Treasury types have done.

    Max Bradford, our electricity system used to be pretty good before he arrived. Now the Key
    government wants to sell it.

    Bill (Dipton) English also wants to sell Bradford’s legacy.

    I could go on but it just gets too depressing.

    Perhaps Treasury could be downsized to accounts clerks, I imagine about six, a computer and readily available software would suffice.

    That way decisions could be directly sheeted home to governments.

    I realise this a dynamic thought and may offend some.


    Comment by peterlepaysan — December 5, 2011 @ 11:51 pm

  12. Treasury has been a politicised ideological fortress since at least the eighties and it is in serious need of reform. Reform is something treasury has demanded of everyone but itself, but it it needs reform as well because it gives inaccurate and poorly informed real world advice and because it has become power unto itself and it needs to have it’s wings clipped and that power reigned in.

    The answer for any incoming left wing government is to take Treasury at it’s own word. Downsize Treasury and strip it of any economic forecasting or advisory role. Reduce it to just a bunch of book keepers. Expand the role of the ministry of economic development to include providing contestable economic advice and forecasting.

    The other option would be to frankly admit that at the top at least our civil service is no longer non-political but rather colonised by Treasury appointees who are all rigid right wing acolytes, and for Labour to simply publish a list of those civil servants whose resignations they would expect the day after it won the election, together with a list of names of those who they would be appointing to take the jobs.

    Comment by Sanctuary — December 6, 2011 @ 7:38 am

  13. Reform is something treasury has demanded of everyone but itself”

    Yeah, like budget cuts – Treasury isn’t facing the same pressure for savings that every other government agency is expected to find. A bit like the SSC wanting more big conglomerate/multifunction public agencies because of efficiencies of scale – and then hiving off a bunch of its own functions to other departments, so SSC can focus on its core business. Someone should tell them to practice what they preach. Then maybe we would respect them a little bit more. (Maybe.)

    Comment by MeToo — December 6, 2011 @ 8:14 am

  14. Charterise Treasury. /head explods/

    Comment by merc — December 6, 2011 @ 9:22 am

  15. Danyl: if not Neutral Evil, then maybe Lawful Stupid?

    Comment by DeepRed — December 6, 2011 @ 9:42 am

  16. The best thing for the economy, would be if all economists spontateously combusted.

    Comment by gn — December 6, 2011 @ 10:37 am

  17. “Maybe if we had a media that asked questions instead of repeating press releases? Of course, first they would have to find and employ some real journalists from somewhere.

    Where from?”

    From among self-employed heterosexual male gun owners, of course.

    Did I do it right, Red?

    Comment by Hugh — December 6, 2011 @ 2:48 pm

  18. Er, excuse me what is it that Treasury actually do?

    Comment by peterlepaysan — December 6, 2011 @ 9:15 pm

  19. Government departments don’t want to make angry a government that has threatened over and over to gut their funding. Especially as those among them know from past experience how venal and petty these politicians can be. At all senior levels in the public service, the Cabinet controls who gets appointed / reappointed. There isn’t REALLY much independence

    NZ politics, government and regulatory environment is thus effectively corrupted. That’s why I laugh when Transparency International rate NZ highly as not corrupt. Our smallness leaves everyone in the public sector vulnerable to the caprice of government so we an’t actually trust the work of many of our government deparments. They dare not tell the truth to the people who pay their wages: us.

    ..and the sleepy hobbits dream on….blissfully unaware that as each year passes the ethical bar slips lower and lower BECAUSE they refuse to learn how things work and pay attention.

    Comment by Steve (@nza1) — December 8, 2011 @ 2:59 pm

  20. Update: 1st October 2012 – “The Treasury is warning that it expects the country’s economic growth to slow and unemployment to remain high.”,-high-unemployment

    Comment by James Shaw (@jamespeshaw) — October 2, 2012 @ 7:55 am

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